Billionaire Ray Dalio had an amazing reaction to an employee calling him out on a mistake

In 2010, a company's returns exceeded the combined profits of
Google, eBay, Yahoo, and Amazon.

It wasn't a tech giant; it was Bridgewater, a hedge fund that has
been recognized for making more money for clients than any hedge
fund in the history of the industry. Bridgewater anticipated the
financial crisis, warning clients in 2007 about the impending
crash.

In the investment world, you can only make money if you think
differently from everyone else. Bridgewater has prevented
groupthink by inviting dissenting opinions from every employee in
the company.

When employees share independent viewpoints instead of conforming
to the majority, there's a much higher chance that Bridgewater
will make investment decisions no one else has considered and
recognize financial trends no one else has discerned.

That makes it possible to be right when the rest of the market is
wrong. As Berkeley psychologist Charlan Nemeth shows, minority
opinions improve decisions even when they are wrong.

Bridgewater's billionaire founder, Ray Dalio, has been called the
Steve Jobs of investing. He believes that "no one has the right
to hold a critical opinion without speaking up about it." To make
sure that people share those critical opinions, Dalio goes to
unusual lengths.

Here's an email that Jim, a client adviser, sent to Dalio after a
meeting with an important potential client:

Ray — you deserve a "D‑" for your performance today . . . you
rambled for 50 minutes . . . It was obvious to all of us that you
did not prepare at all because there is no way you could have and
been that disorganized at the outset if you had prepared. We told
you this prospect has been identified as a "must-win". . . today
was really bad . . . we can't let this happen again.

At a typical company, sending an email that critical of a boss
would be career suicide. But instead of reacting defensively,
Dalio responded by asking others who attended the meeting to give
him honest feedback and grade him on a scale from A to F. Then,
instead of hiding Dalio's shortcomings or attacking the author of
the note, Bridgewater's co‑CEO copied the email trail to the
entire company so that everyone could learn from the exchange.

Along with modeling openness to criticism, Dalio has fought
groupthink by refusing to make decisions based on hierarchy.
Rather than conducting a vote where the majority rules, or
deferring to people with the most seniority or status, he strives
to create an idea meritocracy where all perspectives are heard
and the best argument wins.

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To do that, most leaders assign a devil's advocate. The hope is
to get someone to challenge the majority's opinion. But according
to Nemeth's research and Bridgewater's example, we're doing it
wrong.

When people are designated to dissent, they're just playing a
role. This causes two problems: They don't argue forcefully or
consistently enough for the minority viewpoint, and group
members are less likely to take them seriously.

"Dissenting for the sake of dissenting is not useful. It is also
not useful if it is 'pretend dissent' — for example, if
role-played," Nemeth explains. "It is not useful if motivated by
considerations other than searching for the truth or the best
solutions. But when it is authentic, it stimulates thought; it
clarifies and it emboldens."

The secret to success is sincerity, the old saying goes: Once you
can fake that, you've got it made. In fact, it's not easy to fake
sincerity. For devil's advocates to be maximally effective, they
need to really believe in the position they're representing — and
the group needs to believe that they believe it, too.

In one experiment led by Nemeth, groups with an authentic
dissenter generated 48% more solutions to problems than those
with an assigned devil's advocate, and their solutions tended to
be higher in quality. This was true regardless of whether the
group knew the devil's advocate held the majority opinion or was
unsure of the person's actual opinion.

And even if a devil's advocate did believe in the minority
perspective, informing the other members that the role had been
assigned was enough to undermine the advocate's persuasiveness.
Whereas people doubt assigned dissenters, genuine dissenters
challenge people to doubt themselves.

Even though the assigned position is less effective, it's an
attractive option because it seems to provide cover. It's
precarious to genuinely challenge the status quo when you're in
the minority; if you can claim that you're just playing devil's
advocate, you feel protected against criticism or hostility from
the group.

But this isn't what Nemeth found. Compared to assigned
dissenters, authentic dissenters don't make group members
substantially angrier, and they're actually liked slightly more
(at least they have principles).

Instead of appointing devil's advocates, Bridgewater unearths
them. When an important decision needs to be made, Dalio often
conducts a survey to find out what everyone thinks. He then picks
people with extreme views to hold a debate, and invites the whole
company to listen to the opposing perspectives.

"The greatest tragedy of mankind," Dalio says, "comes from the
inability of people to have thoughtful disagreement to find out
what's true."

The author, Adam Grant, is a professor at the Wharton
School of the University of Pennsylvania.Business Insider

Although everyone's opinions are welcome, they're not all valued
equally. "Democratic decision-making — one person, one vote — is
dumb," Dalio explains, "because not everybody has the same
believability."

At Bridgewater, every employee has a believability score on a
range of dimensions. When you express an opinion, it's weighted
by whether you've established yourself as believable on that
dimension. Your believability is a probability of being right in
the present, and is based on your judgment, reasoning, and
behavior in the past.

The most powerful lesson we can take away from Bridgewater is
self-awareness. In presenting your views, you're expected to
consider your own believability by telling your audience how
confident you are.

If you have doubts, and you're not known as believable in the
domain, you shouldn't have an opinion in the first place; you're
supposed to ask questions so you can learn. If you're expressing
a fierce conviction, you should be forthright about it — but know
that your colleagues will probe the quality of your reasoning.
Even then, you're expected to be assertive and open-minded at the
same time.

As management scholar Karl Weick advises, "Argue like you're
right and listen like you're wrong."